2024 Autumn Budget: Key Updates for Businesses and Job Seekers
The 2024 Autumn Budget has brought several changes that are set to impact businesses and the job market across the UK. Whether you’re a business or seeking a new role, it's essential to understand these shifts and how they will shape the job market and business operations moving forward.
Minimum Wage and National Insurance Contributions Increase
One of the standout changes is the increase in National Minimum Wage and the National Insurance contributions paid by employers. There will be a 1.2% increase in National Insurance Contributions from April 2025, and contributions will start from £5,000 (rather than £9,100). There is also an increase in the National Living Wage by 6.7% to £12.21 an hour, which is worth up to £1,400 a year for a full-time worker.
This hike will directly raise staffing costs, which may hit labour-intensive sectors like construction the hardest. Businesses could face tighter margins, prompting many to rethink their hiring strategies. Recruitment agencies should be ready to help companies find cost-effective staffing solutions or suggest more flexible models, such as part-time or temporary hires.
Corporation Tax
There was no mention to changes in corporation tax, and so will remain at the higher rate already introduced earlier this year (up from 19% to 25%). This put additional pressure on businesses, especially smaller ones that were already dealing with increased costs.
From a recruitment perspective, some businesses may hesitate to expand their workforce due to higher tax burdens, potentially slowing down hiring in the short term. However, sectors like technology, green energy, and construction, which have seen government incentives for growth, could still see recruitment demands.
Skills and Training Boost
To encourage skills development, the Autumn Budget also includes the establishment of Skills England. This is positioned as a key institution to ensure a highly-trained workforce for economic growth and to break down barriers to work.
There is also an upcoming “Get Britain Working” white paper which will outline plans to reform skills training to support more people into jobs.
Capital Gains Tax
Changes to Capital Gains Tax (CGT) will affect many business owners and investors. The increase in CGT (raised from up to 20% to up to 24%) will apply to profits from selling shares, but rates on gains from property sales will remain the same.
What next?
With these changes now in place, it’s important for employers to evaluate their hiring strategies and operational costs. Recruitment agencies should be proactive in advising clients on navigating these economic shifts, helping them balance the increased costs of hiring with finding the right talent to keep their business competitive.
For businesses looking to streamline costs while maintaining their workforce, agencies should suggest flexible staffing solutions, review apprenticeships or training incentives, and keep an eye on sectors where growth opportunities remain strong.